8/16/2007

Essex County Judge removes two properties from Maplewood redevelopment area: New Jersey Eminent Domain Blog, 7/28/07

By William Ward

Yesterday Essex County [NJ] Superior Court Judge Donald Goldman vacated Maplewood’s blight declaration for two properties, one owned by Carolyn Evans and the other owned by Richard Rio of the Rivco Group LLC.

The case was an action in lieu of prerogative writs where the plaintiffs contested the inclusion of their properties in an “area in need of redevelopment” under the Local Redevelopment Housing Law (LRHL), N.J.S.A. 40a:12A-1 et seq. The plaintiffs argued that the action of the defendant township was arbitrary and capricious and not based on substantial, credible evidence as required by the law. Download the PDF opinion in Carolyn Evans and Rivco Group, LLC v. Township of Maplewood (L-6910-06).

The court relied heavily on the recent case of Gallenthin Realty v. Borough of Paulsboro, 191 NJ 344 (2007). The court rejected Maplewood’s argument that the suit was premature because no plan for redevelopment has been adopted and no condemnation was imminent. Maplewood’s argument is typical of the disingenuous blather presented to property owners who oppose a blight designation under the 45-day time constraints. Municipalities are cavalier but deliberate when they ignore the impact of a declaration of blight or area in need of redevelopment: that designation, left unchallenged, is the foundation for subsequent eminent domain action by the municipality. The court noted:
Maplewood and its Planning Board also oppose this lawsuit on grounds of ripeness and standing. They argue that the case is not ripe for review because no development plan is yet in place. Evans and Rivco respond that the designation of an area in need of redevelopment is binding and permanent, and therefore can be challenged by anyone subject to its effects. This Court finds that Evans and Rivco have standing to challenge the designation. Gallenthin is itself evidence that a designation as an area in need of redevelopment is justiciable and that an attack on it is not premature. However, other relief sought by Evans and Rivco will be denied because such relief is premature. No attempt at taking their property is planned or suggested. Moreover, even an erroneous designation as being part of an area in need of redevelopment would not immunize the Evans and Rivco properties from being acquired for a truly public use. (Slip Opinion at page 3.)

The municipal action by the Maplewood mayor and council was especially egregious in this case because they rejected the opinion of their own planning expert, Paul Phillips, of Phillips Price Shapiro of New York City. Instead, Maplewood relied on unsworn testimony and opinions from the township’s special redevelopment council, N. David Mildner, a consultant commissioned to prepare an economic development plan, who said during his testimony before the planning board:
Mr. Finn: Are you familiar with the redevelopment criteria under state law?

Mr. Mildner: Yes, I am familiar with it, but I am not an expert on it, sir.

Mr. Finn: Because I wanted to ask you if you could evaluate the site in the context of that redevelopment criteria. What you presented, as far as I could hear it, was more about how the site would be limited in terms of its redevelopment potential. But in terms of measuring or evaluating that site versus the redevelopment criteria, is there anything else you can add relative to that?

Mr. Mildner: I pride myself on something that I read while I was in college, and that is Socrates’ claim to be the smartest man in Greece for the reason that he acknowledged what he didn’t know. I try to emulate him, and so I do not consider myself to have the expertise of a professional planner, so I really would like to defer offering any opinion as to those criteria.

The planning board also accepted an unsworn summary from its chairman regarding conversations which he had with Peter Beronio and Mildner, including a memorandum from Beronio without any sworn testimony. The court ruled that this testimony was insufficient to prove blight by substantial, credible evidence. While not ruling on the sparse proofs presented to the planning board and relied on by the mayor and council, the court noted the following:
The parties argued at length, but this Court does not reach, the issue of whether comments, deliberations and “wrestling” with issues by the Planning Board or Committee, in the absence of expert opinion, sworn testimony or other substantial evidence that directly supported their decisions in this case, could have constituted substantial evidence in the record sufficient to validate the designation. The argument to the contrary appears to have some force. In the event Maplewood and its Planning Board seek to include the Evans or Rivco properties in a redevelopment area again, this Court urges them to spare themselves the frustration, and this Court the burden, of reasoning through this admittedly interesting issue, by taking care to firmly ground the deliberations in sworn testimony and other undeniably substantial evidence on the record. (Slip Opinion at page 7)

The court further recognized that Gallethin settled an aspect of the redevelopment law that must be upheld:
Although not reaching the substantial-evidence issue as briefed by the parties, this Court cautions Maplewood that the arguments about the lack of an adequate record have merit. The process followed in this case is uncomfortably close to what Gallenthin warned against:
Although issues of law are subject to de novo review, municipal redevelopment designations are entitled to deference provided that they are supported by substantial evidence on the record. The substantial evidence standard is not met if a municipality's decision is supported by only the net opinion of an expert….

In general, a municipality must establish a record that contains more than a bland recitation of applicable statutory criteria and a declaration that those criteria are met. Because a redevelopment designation carries serious implications for property owners, the net opinion of an expert is simply too slender a reed on which to rest that determination. Gallenthin, supra, 191 N.J. at 372-73. (emphasis added)

As noted above, the application of the substantial evidence standard to this case presents a number of interesting issues. Maplewood and its Planning Board are urged to avoid the expenditure of time and money involved in resolving those issues, by making sure future decisions are expressly based on substantial evidence that is undeniably in the record, sworn, and supported by expert opinion not susceptible to characterization either as net opinion (for example, unelaborated references to properties as “moribund” or lacking in “charm”), or as observations made outside the record.

To date, there have been seven significant decisions in New Jersey, circa-Gallethin, that focus on the determination of blight and the use of eminent domain under the LRHL. The decisions in Lodi, Bloomfield, Newark, Belmar, Camden and Maplewood demonstrate that the courts will not accept or give deference to municipal blight declarations which are not supported by substantial, credible evidence. The message is clear: the New Jersey courts are looking at these prerogative writs actions and expert testimonies through the lens of Gallenthin. As a consequence, municipalities that present evidence less than required by Gallenthin are subject to losing their blight designations and redevelopment projects.


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